| General FAQ’s |
| In a sale of property, who has to bear the expenses of registration and stamps? |
| The universal rule is that the purchaser has to bear all expenses regarding registration. However if the seller and buyer mutually agree otherwise, then the seller would have to bear the expenses. |
| In whose name are the stamps/non – judicial stamp papers required to be purchased? |
| The non-judicial stamp papers are required to be purchased in the name of either the purchaser or seller. Generally it is bought in the name of the purchaser since he bears the expenses of registration. |
| From where can we get information regarding the guide line value? |
| The Sub-Registrar of the area, in whose jurisdiction the property is located, is the appropriate authority for knowing the guideline value of the property. This is also available on the internet. |
| What exactly do we mean by a Free Hold title to a property? |
| A property of which its owner is the absolute and full owner without any limitations to ownership is called a free hold title to the property. |
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| FOR NRI’s |
| Who is a PIO? |
A person of Indian origin means an individual (not being a citizen of Pakistan or Bangladesh or Sri Lanka or Afghanistan or China or Iran or Nepal or Bhutan) who:
i) Held an Indian Passport at any time, or
ii) Who or whose father or paternal grand father was a citizen of India by virtue of the Constitution of India or the Citizenship Act, 1955. |
| What are the types of Property can a NRI/PIO purchase in India? |
| There are no restrictions on the numbers of Residential/Commercial Properties (other than agricultural land/farm house/plantation) that can be purchased. |
| Do NRI/PIO require permission of The Reserve Bank to acquire residential/ commercial property in India? |
| No. All Indian citizens are entitled to buy property in India, irrespective of their residential status. |
| How should the purchase of residential immovable property be paid for by NRI/ PIO under the general permission? |
| The purchase consideration should be met either out of inward remittance in foreign exchange through normal banking channels, or out of funds from NRE/FCNR(B)/NRO accounts maintained with banks in India. |
| Does a NRI/PIO, requires to have a company in India or abroad or both for purchasing of property? |
| No. |
| Can NRI/ PIO's acquire or dispose residential property by way of gift? |
Yes, NRIs and PIOs can freely acquire immovable property in India by way of gift either from
(i) person resident in India
(ii) NRI
(iii) PIO
However the property can only be commercial or residential.
Again NRIs and PIOs may gift residential/ commercial property to
(i) person resident in India
(ii) NRI
(iii) PIO
(iv) Foreign national of non Indian origin - with approval of RBI
Is there are any Lock in period for such investment?
Currently there is no lock in period.
Can NRI/PIO sell their purchased property without the permission of Reserve Bank?
Yes. Reserve Bank of India has granted general permission for sale of such property to the following categories:-
" To a NRI
" To a PIO (If the seller is a PIO, then a prior approval is required from RBI)
" To a person Resident of India |
| Can the sale proceeds of such property (if and when sold) be remitted/repatriated out of India? |
Yes the sale proceeds can be remitted/repatriated out of India
In the event property acquired out of foreign exchange source i.e. remittance through normal banking channels/ debit to NRE/ FCNR(B) accounts, the amounts to be repatriated should not exceed the amount paid for such property from such source. However, repatriation of sale proceeds purchased out of foreign exchange is restricted to not more that two residential properties, in a block of one year, with a facility of crediting the Capital gain to the NRO account.
Again in the event the property was acquired out of Rupee source, an amount not exceeding USD one million, per financial year, subject to tax compliance, out of balance held in NRO account, may be remitted/repatriated. |
| In case of repatriation is there any tax liability to the Indian Government? |
Yes, during repatriation Capital Gains (Long Term/Short Term) as applicable will be attracted.
Long Term Capital Gains: For properties held for 36 months or more are termed as
Long Term Capital Assets, and currently attracts a rate of 22.6%
(Fin. Year: 2007-08)
Short Term Capital Gains: For properties held for less than 36 months are termed as
Short Term Capital Assets, and currently attracts a rate of 33.9% |
| Can the properties (residential/commercial) be given on rent if not required for immediate use? |
| Yes.The Reserve Bank has granted general permission for letting out any immovable property in India. |
| Can rental Income be repatriated? |
| Repatriation of income derived out of letting of immovable property is permissible. NRI/PIO can rent out the property without approval of Reserve Bank. Rent received can be credited to NRO/NRE account or remitted abroad. Powers have been delegated to the Authorized Dealers to allow repatriation of current income like rent, interest, dividend etc. of NRI/PIO who do not maintain an NRO account in based on an appropriate certification by Chartered Accountant, certifying that the amount proposed to be remitted is eligible for remittance and that applicable taxes have been paid/ provided for. |
| How would our land be secured and maintained? |
We undertake the work of fencing the land and hang out a board stating “This property belongs to xyz” Plus every month our employee go and look at the land bought by our clients. And if the clients want there land |
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